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Guidance defines Cause-based Commerce

September 15, 2011

So, what is cause-based commerce? Guidance researched hundreds of sources on the Web and found out that there’s a lot of talk about cause marketing, but cause-based commerce goes beyond the marketing aspects of it – cause-based commerce is a business model.

Guidance’s definition of “Cause-Based Commerce” (also called “Retail Philanthropy”) –
“A type of transaction consisting of the buying and selling of goods with the add-on purpose of supporting a charitable cause.”

Examples of Guidance developer Caused-Based Commerce sites:
- Toms www.toms.com “One for One” – For every pair of shoes sold, Toms give a one pair to a child in need.
- Gifts that Give www.giftsthatgive.com Customers can choose to support any cause from within Gifts that Give’s database of more than 1.2 million GuideStar-approved charitable causes. The amount of the purchase that goes to support the cause of their choice is automatically calculated and viewable on the customer’s shopping cart. The shopping cart also allows them to add addt'l donation amounts.
- One Hope Wine www.onehopewine.com: Half of all profits go to charity.

So who buys cause-related products?
1) As you would correctly think, causes are big among moms, probably due to their nurturing nature.

2) Millennials ages 18-24 also sympathize with causes, probably because of their social nature and their spread throughout social media.

- 84% let social or environmental causes influence where to buy and/or what to shop, and 85% of millennials who are interested in social or environmental causes are likely to switch brands. Source: Cone, conducted by ORC
- 33% say that brands that are environmentally-safe OR connected to a cause have already influenced a previous purchase. Source: Harris Interactive commissioned by Alloy Media.

3) Men care about causes too.
67% of men would try a brand because it supports a cause. Causes that affect children and general health-related matters are typically preferred by man – think about the success of the Livestrong campaign, for example. Source: PR Week and Barkley

Consumers DO prefer cause-related products:
- 79% of Americans say they would be likely to switch from one brand to another, if the other brand is associated with a good cause. That is, when price and quality are about equal. Source: Cone
- 50% of Internet users would spend 6% or more on a $100 product from a company that’s socially responsible. That means, price really isn’t relevant to half of Internet users if they know that - with their purchase - they’ll be supporting a socially responsible company. Source: Penn, Schoen & Berland Associates, Landor Associates and Burson-Marsteller.